World Bank anticipates easing global food prices

Feb. 1, 2012
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by Eric Schroeder

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WASHINGTON — Global food prices, which were about 24% higher on average in 2011 than they were in 2010, are expected to decline in 2012 on increasing supplies although they still remain volatile, according to the World Bank.

“Prospects for decline in 2012 food prices remain favorable, due to weaker consumer demand as a result of a sluggish global economy, expected declines in the price of energy and crude oil, and strong forecasts for 2012 food supplies,” the World Bank said in its “Food Price Watch” report issued Jan. 31.

An encouraging sign for 2012 prospects was an 8% decline in global food prices during September-December 2011, the World Bank said. The average price of grains fell 10% during the September-December period, including a 15% decrease in the price of wheat, a 12% drop in the price of maize, an 8% decrease in the price of soybean oil and a 2% drop in the price of rice. For the full 2011 year, the price of wheat and soybean oil was down 12% and 9%, respectively, from 2010, while the price of rice and maize increased 10% and 3%, respectively.

Specifically, wheat prices were up 88% in Belarus between 2011 and 2010, up 23% in Ethiopia, up 13% in Bolivia and up 10% in China. The price of maize, meanwhile, was up 117% in Kenya, up 106% in Mexico, up 84% in South Africa and up 76% in Ethiopia.

“The worst food price increases may be over but we must remain vigilant,” said Otaviano Canuto, vice-president for poverty reduction and economic management at the World Bank. “Prices of certain foods remain dangerously high in many countries, leaving millions of people at risk of malnutrition and hunger. Governments must step up to the plate and implement policies to help people cope.”

Among the factors that may cause upward price pressure in 2012 are a possible increase in demand for biofuels, low stocks-to-use levels for maize, volatility in oil prices as a result of unrest in producer countries, and weather changes, the World Bank said.

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